The influence of foreign factor prices and international taxation on fixed investment in the UK

This paper examines the influence of foreign factor prices and international corporate taxation on domestic fixed investment in the UK. There is a large literature which examines the effects of taxes and factor prices on transnational investment. This paper extends this analysis by showing in theoretical terms how domestic factor choice is affected by these influences. Empirical evidence is presented which shows the importance of these factors in determining factor choices in the UK manufacturing sector.